Management’s Role In Distributorship

Abstract

Distributorship is a key component of any business entity. This paper evaluates the role of management, focusing mainly on distributorship as a critical element any business formation. Essentially, electronic sources and a number of print media resources proved worthwhile in providing crucial information in respect of this assignment. There is intense investigation on aspects of planning, organizing, leading and controlling that are crucial tasks, which the management has to handle for effective distributorship. This, in essence, involves an examination of the entire process of choosing a distributor and maintaining the relationship that comes between such a party and the business entity. There is a dire need for sound managerial power in sustaining effective distributorship for the profitability of a business. Customer satisfaction is attainable only if the relationship between management and distributors is reliable.

Introduction

Simply, distributorship is an arrangement in which the manufacturers earn money on the sale of the real goods that reach their clients rather than for the right to handle the distribution of such goods. Therefore, a distributor usually escapes the burden of having to pay, for the right to distribute products or services of a manufacturer, a different concept from a franchise business arrangement. Distributorships fall under the laws of distributorship and contractual laws, as well as other business laws (ICC Pub, 2002). The laws of distributorship vary from setting to another. They are complex in nature, making it inevitable to make due consultations before agreeing on such an arrangement.

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A distributor is any person who actively participates in the distribution of information about products and/or services. He or she provides services to the manufacturer’s clients in matters of purchasing the company products and searching for new prospects with regard to the distribution exercise. This is different from a distributor for vision: an upholder of the business entity’s ideas and philosophy who is also a training instructor in sales and recruiting, and a partner for the Company in solving pertinent matters.

The management of any business has to take the leading role in ensuring that the distributorship is sustainable and fulfilling. However, there are some challenges that management has to deal with, emanating from their relationship with distributors. The management has to beware of such realities, taking into account profitability of their business and customer satisfaction as their primary concerns (Malone, 2006).

Managing Distributorship Arrangements

Before settling on any given party, for the role of distributing a product to a business, one has to consider a number. Firstly, there should be a definite market for that product. Additionally, information about the product and the history of the distributor are crucial points to consider. There is also need to conduct a thorough research, making comparisons of various service providers before making one’s final decision.

After signing a contract with the preferred distributor, it is the responsibility of the business to manage that relationship. To begin with, the management must set their target soundly, with regards to that engagement. Secondly, it is the task of the business management taking charge of the whole arrangement. Adequate communication is essential as it ensures knowledge of the state of affairs with regard to the undertaking with the distributor. It is also vital to ensure the company gets weekly or monthly sales reports so that the management evaluates business performance against their targeted goals; D. Fisher (1998) and S. Fisher (1998).

Challenges of Distributorship to Management

There are various challenges that distributorship brings to business management. One of the challenges is that it is difficult for any distributor living up to their expectations. Whereas a business’ management would be struggling to get value from the relationship, a distributor would equally be making an effort to justify the state of affairs as it may be. It sometimes becomes immensely difficult to motivate a distributor while ensuring expecting to earn the business maximum profits. Consequently, such business relationships never last long enough; the contractual partners spend most of their time discussing their business contract, and they end up obtaining less than what they hoped for, from the arrangement.

Major Components of Project Management

There are several components of project management in the modern environment. The five, critical ones include scope management, quality management, time management, cost management and risk management. Quality Management (which may fall under the concept of Total Quality Management) ensures that there is a guarantee of customer satisfaction. Scope Management demarcates the boundary that separates the dos and don’ts of the business. Besides, Time Management seeks to limit time wastages and makes sure that a business utilizes time effectively. Additionally, a business cuts costs and optimizes expenditures by following guidelines under the cost management concept. Finally, there is the concept of risk management, under project management. The management implements this concept to cushion the business from tragedies and decisions that pose serious risks to the business venture (Malone, 2006).

Conclusion

Distributorship may be necessary, especially in cases of bulk production of a product. To avoid strain on the company staff, the management may opt to outsource the services of distributing a given product. This process must be thorough and meticulous in order to evade, or minimize, the common challenges that come with such arrangements. The success or failure of a distributorship lies with the management of a business entity. The management has to be in charge from start to the end, taking into account project management aspects, to meet the target of the business through profitable performance by both the business itself and the distributor.